Idaho Admin. Code r. 35.01.02.116 - BONDING

Section 63-3625, Idaho Code

01. Posting Security. The Commission may require a retailer to post security to insure collection and remittance of sales and use taxes for cause including: (3-31-22)

a. A retailer failing to file sales tax returns. (3-31-22)

b. A retailer failing to remit in full taxes due upon any sales tax return. (3-31-22)

c. A retailer with a consistent history of delinquency either in the filing of returns or payment of tax. (3-31-22)

d. The submission of a check for the payment of taxes which is subsequently dishonored. (3-31-22)

e. The filing of a fraudulent return or any return which fails to report all taxable transactions for the period for which the return relates. (3-31-22)

f. A retailer evidencing serious financial instability which, in the opinion of the Commission, creates reasonable doubt as to the ability of the retailer to pay over sales and use taxes collected by it. (3-31-22)

02. Amount of Security. The amount of security will be fixed by the Commission but will not exceed an amount equal to three (3) times the anticipated monthly sales tax liability or ten thousand dollars ($10,000), whichever is less, except in the case of retailers who are habitually delinquent in their submission of returns and/or taxes in which case the amount of security will not be greater than five (5) times the estimated average monthly liability or ten thousand dollars ($10,000), whichever is less. (3-31-22)

03. Written Demand. Written demand for security will be sent to the retailer by the Commission by certified mail or by personal service upon the retailer. Failure of the retailer to post the demanded security can be grounds for revocation of the retailer's seller's permit following proper notice and hearing. (3-31-22)

04. Forms of Security. The Commission will accept as security the following: (3-31-22)

a. Surety bond. A surety bond issued by a bonding company with the power of an attorney affixed thereto which grants the issuing agent the power to obligate the company for this type of liability. (3-31-22)

b. Cash bond. Preferably in the form of cashier's check. (3-31-22)

c. Pledged savings accounts. This type of security may be furnished, providing the savings account is opened with a bank or savings and loan association and an assignment of the account is executed by the taxpayer or authorized individual and accepted by the bank or savings and loan association. The savings account may be in the business name or individual's name, if a sole proprietorship; jointly in the names of the partners of a partnership; or in the name of a corporation with the assignment properly executed by the officer or officers with the delegated authority to sign documents for the corporation. (3-31-22)

05. Release of Security. Security which has been previously posted may be released by the Commission upon receipt of written request from the retailer if, after careful review of the circumstances, the Commission determines that security is no longer required. A request may be made one (1) year after posting the security. Security will also be released upon the retailer's termination of its retail activities. In either case, if the Commission deems necessary, an audit may be conducted prior to the release of any security. (3-31-22)

Notes

Idaho Admin. Code r. 35.01.02.116